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  • FIRST POST
    • user3
    • By user3 7th Aug 18, 10:04 AM
    • 4Posts
    • 1Thanks
    user3
    Understanding forex charges
    • #1
    • 7th Aug 18, 10:04 AM
    Understanding forex charges 7th Aug 18 at 10:04 AM
    Hello all,

    I have a Mastercard credit card (issued by an overseas bank) marketed as having 0% transaction fees on foreign purchases.

    However, using Mastercard's online tool, I am getting charged a 1% bank fee on each transaction.

    I have tried to chase this up with my bank, but I haven't really got a satisfactory response.

    Their latest response was they have "no control over the charges levied by network" and confirmed that the card has a "0% foreign currency transaction margin".

    I'm trying to figure out if I'm being given the run around by my bank, or if I'm misunderstanding how these things work.

    What is meant by foreign currency transaction margin?

    Is it feasible there is a middle-man between Mastercard and my bank, and they are the ones taking the 1%?

    Many thanks in advance for any help!
Page 1
    • zx81
    • By zx81 7th Aug 18, 10:06 AM
    • 18,026 Posts
    • 19,236 Thanks
    zx81
    • #2
    • 7th Aug 18, 10:06 AM
    • #2
    • 7th Aug 18, 10:06 AM
    What card are you using and where are you using it?
    • D_M_E
    • By D_M_E 7th Aug 18, 1:03 PM
    • 1,667 Posts
    • 63,777 Thanks
    D_M_E
    • #3
    • 7th Aug 18, 1:03 PM
    • #3
    • 7th Aug 18, 1:03 PM
    Issued by an overseas bank - so it's a card which is not from a UK bank, then.

    Are you buying stuff with it here in the UK and are you choosing to pay in the local currency, or the currency the card was issued in?

    Have you looked at, for example www.xe.com or somewhere similar to compare the exchange rate you are getting?

    At the end of the day, while a 1% charge is a bit much when you expect 0%, it's not that much compared to a lot of others.
    • eDicky
    • By eDicky 7th Aug 18, 2:09 PM
    • 3,693 Posts
    • 1,852 Thanks
    eDicky
    • #4
    • 7th Aug 18, 2:09 PM
    • #4
    • 7th Aug 18, 2:09 PM
    What is meant by foreign currency transaction margin?
    Originally posted by user3
    I would understand this as the percentage margin or markup on the straight MasterCard exchange rate, that is usually imposed by the card issuer, in this case zero.

    But what they mean by the 'charges levied by the network' is something you should perhaps get them to clarify.

    Do you see the exchange rate for a transaction on your statement? It will be for the date of settlement, which is the date that you need to check the MasterCard rate for.
    • user3
    • By user3 7th Aug 18, 5:47 PM
    • 4 Posts
    • 1 Thanks
    user3
    • #5
    • 7th Aug 18, 5:47 PM
    • #5
    • 7th Aug 18, 5:47 PM
    What card are you using and where are you using it?
    Originally posted by zx81
    It's issued by a Middle Eastern bank, and used in various locations around the world (including the UK).
    I appreciate this is a UK based site, but in my experience it contains a wealth of knowledge so I thought I'd try my luck in case I'm missing something obvious.
    Last edited by user3; 07-08-2018 at 5:56 PM.
    • user3
    • By user3 7th Aug 18, 5:54 PM
    • 4 Posts
    • 1 Thanks
    user3
    • #6
    • 7th Aug 18, 5:54 PM
    • #6
    • 7th Aug 18, 5:54 PM
    Issued by an overseas bank - so it's a card which is not from a UK bank, then.
    Originally posted by D_M_E
    Correct
    Are you buying stuff with it here in the UK and are you choosing to pay in the local currency, or the currency the card was issued in?
    Originally posted by D_M_E
    I always pay in the local currency (any where in the world) and let my bank handle the conversion.
    Have you looked at, for example x or somewhere similar to compare the exchange rate you are getting?
    Originally posted by D_M_E
    I'm using the Mastercard rates, which let me check exactly what Mastercard is charging. The mystery is the 1% loading on those rates. And it is always exactly 1%. I'm happy with the Mastercard rates, as I know I don't have any control over them!
    At the end of the day, while a 1% charge is a bit much when you expect 0%, it's not that much compared to a lot of others.
    Originally posted by D_M_E
    Yes, I fully agree. But now it bugs me because it isn't as advertised! (no such protections like the UK in this regard)
    • user3
    • By user3 7th Aug 18, 5:55 PM
    • 4 Posts
    • 1 Thanks
    user3
    • #7
    • 7th Aug 18, 5:55 PM
    • #7
    • 7th Aug 18, 5:55 PM
    I would understand this as the percentage margin or markup on the straight MasterCard exchange rate, that is usually imposed by the card issuer, in this case zero.
    Originally posted by eDicky
    That is what I took it as too.
    But what they mean by the 'charges levied by the network' is something you should perhaps get them to clarify.
    Originally posted by eDicky
    Good point
    Do you see the exchange rate for a transaction on your statement? It will be for the date of settlement, which is the date that you need to check the MasterCard rate for.
    Originally posted by eDicky
    Yes, I'm checking the correct numbers / dates. I would post a link to the correct page on Mastercard's website, but I can't post links yet. It is fairly idiot-proof, and (as I mentioned above) the rate is always loaded bang on 1%.
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